For the majority of the population, most advisors continuously drive home the importance of retirement savings, college savings, and the proper stock/bond allocation balance etc. for their clients….as they should. However, a big part of any financial plan and arguably the most importance, is often times neglected because advisors just don’t like talking about it: life insurance.
Term life insurance should be the baseline for anyone that has any type of dependent that relies on them for income. New Universal life insurance and whole life insurance products (permanent insurance) offer the ability for policyholders to build cash value in these policies that can help keep the cost of insurance down later in life as well as come in handy if (and when) your family needs emergency funds. There are virtually no limitations to what the cash value can be used for. Many couples with young children have a cash value life policy in place to help pay for college when the time arises. Other families utilize life insurance to offset long term care expenses and/or supplement retirement income. Others use the funds to pay off a remaining mortgage balance, the list goes on.
You can think of universal and whole life policies almost as a ‘forced savings’ plans for your family, that includes the life insurance element to protect your loved ones. Furthermore, if the life policy is structured properly, the income can be taken on a tax free basis, which is incredibly important considering overall taxes are on the rise in this country. Another nice benefit is that compared to qualified retirement plans, there are no age restrictions from which you can draw income from a life insurance policy.
For most people, leaving a lasting legacy is important. Nothing accomplishes this better than to be able to leave funds behind that can help your loved ones to start the business they have always dreamed of, or maybe purchase their first home, or attend and graduate from college.
During a time when it is getting a tougher to save in this country, why not kill two birds with one stone with permanent cash value life insurance? Please don’t hesitate to contact us for more details